Change. Accelerated. Live: Sustainable Cities of Tomorrow

Tell us about your research and the role of the urban agenda in the work you do. They say: “Cities are now acting as real innovation hubs”. Is this true and if so, which city innovations are you focusing on?

Our Next Generation investment philosophy focuses on megatrends and the structural changes they are causing in our societies and economies. The megatrends that we have identified as drivers of our theme ‘Future Cities’ are: Climate change, sustainability, digitalization and urbanization.

Against this background, we look specifically at the role of infrastructure, both traditional and digital, but also at the efficiency and technology of buildings, and the innovation taking place in these areas. While there is a lot of innovation happening in and around cities, we must also be aware of the fact that cities themselves tend to move slowly. This is primarily due to the long lead times that decisions can take, for example in the field of infrastructure and building construction. Secondly, this is because the city is a long-term asset, that is, a lifespan of infrastructure and buildings that can last several decades.

Overall, our work on ‘Future Cities’ is strongly focused on the impact of technology, i.e. how cities can become smarter, more sustainable and ultimately more liveable.

Today, AI tools and data management systems are helping cities reduce traffic congestion and air pollution and improve traffic flow. What are some of the most advanced solutions in this field?

While many concepts exist on how data-driven decision making could improve traffic flows to reduce congestion and air pollution, its actual implementation is lagging behind for several reasons.

Firstly, many cities are simply not there yet. They lack the required digital infrastructure, which is the backbone of any data-driven solution that can help manage traffic flows. Second, there are concerns about data privacy. This is very much a European phenomenon, as people fear being tracked on the routes they take and worry about any unrelated use of their data. Thirdly, there is a risk that public resistance will arise against, for example, dynamic road pricing or congestion charges. Although it would make sense from an economic and environmental point of view to set up a dynamic pricing mechanism for the city centers, citizens might complain about inequitable access and exclusion. All in all, this makes data-driven traffic management much more of a vision than a reality.

Many of the world’s cities are moving towards Net Zero. Which urban areas are the most carbon intensive? What is the best way to achieve emissions reductions in a short time?

Every city’s carbon footprint is primarily about transportation, buildings and infrastructure. The road transport sector is responsible for 15% of global emissions, with the electrification of cars being the biggest lever to reduce these. This trend is of course already in full swing, especially in the developed world.

Buildings are responsible for another 40% of CO2 emissions. It is important to note that for buildings this includes both operational carbon emissions and embedded carbon emissions. Operational emissions are related to the electricity consumption of the building and its heating and cooling systems. This can easily be reduced by obtaining electricity from clean energy and replacing natural gas boilers with heat pumps. Again, this is already well underway.

The embedded emissions refer to all carbon released during the construction and demolition phase. This mainly comes from building materials, especially concrete, steel, glass and aluminum. Unfortunately, the decarbonization of these building materials is much less advanced. While we know how to decarbonize them, the required technologies are not available at scale and in a cost-competitive manner. That’s why reducing embedded emissions from today is much more about maximizing structural efficiency, choosing lower carbon alternatives, reusing materials, minimizing construction waste and repurposing rather than rebuilding.

Today, some city streets are testing robotaxies, autonomous shuttles and prototypes of connected shared vehicles. How can these new technologies coexist with conventional mobility systems?

When it comes to such solutions – especially robotaxies and autonomous shuttles – we are still in the early stages. There have been many technological advances in recent years, but it seems that most of our cities are not yet well prepared to roll out these solutions. This is because the ideal conditions that exist in most cities where the solutions are tested do not exist in most other cities. This relates to the design of the road network, the overall quality of the roads and also to weather conditions. Operating robotaxies and autonomous shuttles on clear and sunny days is much easier than on a foggy, rainy or snowy day.

In addition, there is a lot of supervision from the supervisors. When it comes to the safety of autonomous vehicles, they seem to be extra critical, placing much more emphasis on the risks than the opportunities. The evidence that fewer accidents occur compared to human drivers sometimes seems to be ignored – especially as problems with self-driving cars have recently hit the headlines. Last but not least, there seems to be a growing aversion to cities in general, with robotaxis and autonomous shuttles not being seen as a solution.

The urban population will continue to grow. Is there a way to create more inclusive communities and bridge the gap between different levels of economic development in urban areas?

When we look around the world, cities are similar and different at the same time. This means that there are no one-size-fits-all solutions, even though best practices exist. Sharing these practices can help city planners avoid previous mistakes, assuming they take the idiosyncrasies of their city into account.

Cities are economic powerhouses; they account for more than 80% of economic production. As they continue to grow, it is of utmost importance to make this growth inclusive, that is, to enable economic participation. This means, first and foremost, that citizens must be able to get to work without having to deal with excessive travel times, which requires public transport systems that are not only reliable but also safe. Sometimes this requires thinking outside the box, as the examples of the cable cars in La Paz (Bolivia) and Medellin (Colombia) show.

Another element that makes cities more inclusive is the energy transition. The shift to cleaner energy sources makes them more viable, especially in areas that are among the most deprived. It allows citizens to move away from the commonly used household wood- and coal-burning stoves and stoves, vastly improving quality of life and reducing associated health risks.

Creating inclusive communities is of course a much more holistic and therefore very challenging task, including the provision of affordable housing, education and healthcare facilities and a wider range of public services. The most notable challenges are of course related to financing and to some extent also to political will – especially in emerging economies.

Carsten Menke will speak at Formula E and Julius Baer Change. Accelerated. Live event in Monaco ahead of the 2024 Monaco E-Prix. View the agenda and come back after the event for a recap.